City hopes work will start around May 31 on northeast side project

City hopes work will start around May 31 on northeast side project

SOUTH BEND Â? The South Bend Redevelopment Commission stamped its approval Wednesday on the development agreement for the Eddy Street Commons project on the cityÂ?s northeast side.

A few hours later, the South Bend Redevelopment Authority, the financing agent for the project, did the same.

Â?This is a really big deal,Â?Â? Karl King, commission member, said after the unanimous votes on the project.

The agreement still needs a little tweaking to coordinate dates and other small details, but it is substantially in its finished form, according to Donald Inks, director of economic development for the city.

Richard Hill, of the Baker & Daniels law firm, said the agreement will allow the city to begin the process for issuing some $36 million in bonds for the public portions of Eddy Street Commons. The bonds will help finance a 1,278-space parking garage, as well as street and infrastructure work.

Eddy Street Commons is to be created in the area around Eddy Street and Angela Boulevard/Edison Road, just south of the University of Notre Dame.

It is envisioned to be a more than $200 million investment, with two hotels, private housing, restaurants and retail space.

WednesdayÂ?s agreement spells out the terms and responsibilities of the city and Kite Realty Group of Indianapolis, project developer.

Hill said the bonds can be sold as soon as early March, but no money will be spent until all of the final details are complete.

One detail is an agreement between Kite and Notre Dame that would allow Kite to acquire some land owned by the university. Gregory Hakanen, director of asset management for the university, said he doesnÂ?t foresee any roadblocks to finishing the deal, but some technicalities need to be taken care of.

Once Kite has the land from Notre Dame, Hill said, it can convey the land to South Bend.

The agreement sets a schedule for various steps to be taken. One of them is that the city will need a letter of intent from the developer before the bonds are sold.

If, for some reason, the Notre Dame deal fails, or the proposed hotel developer backs out, or some other major glitch happens, Inks said, the cityÂ?s investment will be protected.

ThatÂ?s because the bond money will be held until everything is in place. It can be paid back, Hill said, if the deal fails.

Furthermore, Inks said, the agreement has a Â?bond call costsÂ?Â? provision that requires Kite to reimburse the city for its expenses related to the bond if the deal is not done by May 31. He estimated the cost of issuing the bonds at $800,000.

If everything falls into place by May 31, as planned, ground can be broken and construction can begin, Inks said.

But even before that date, he said, the city can proceed with some work, including the removal of ash deposits in the area southeast of Eddy and Edison, and some earth-clearing work. Kite is to reimburse the city for that work, too, Inks said, if the deal fails to go forward.

Mayor Stephen Luecke thanked both the Redevelopment Commission and the Redevelopment Authority for their work on the project. He said it represents a great partnership with the northeast neighborhood, Notre Dame, Kite and the city.

Luecke said he expects the project to bring regional and national attention to the city once it is completed.